EX-99.1 2 a12-17435_1ex99d1.htm EX-99.1

Exhibit 99.1

 

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FX Alliance Inc. Reports Second Quarter 2012 Financial Results

 

 

NEW YORK, August 2, 2012 - FX Alliance Inc. (“FXall”) (NYSE: FX), the leading independent global provider of electronic foreign exchange trading solutions, today reported financial results for the second quarter of 2012.

 

For the second quarter of 2012, revenues increased 7% to $31.4 million from $29.4 million in the second quarter of 2011. Adjusted Net Income decreased 3% to $6.9 million, or $0.23 per share, from $7.1 million or $0.25 per share for the same period last year.  Net Income of $6.2 million was consistent with the same period last year.  For the six months ended June 30, 2012, revenues increased 8% to $61.4 million from $56.8 million in the same period in 2011.  Adjusted Net Income decreased 7% to $12.0 million for the six months ended June 30, 2012, compared to $13.0 million in the same period last year.  Net Income for the six months ended June 30, 2012 decreased 5% to $10.8 million from $11.4 million in the same period last year.  A full reconciliation of GAAP to non-GAAP financial measures is included with this release.

 

Total average daily volume (counting one side of each trade) was $92.4 billion, an increase of 8% from the second quarter of 2011, driven by growth across both Relationship and Active trading.  Average daily volume for Relationship Trading was $71.5 billion, 5% higher than the second quarter of 2011, while average daily volume for Active Trading increased 18% from the second quarter of 2011 to $20.8 billion.  The average transaction fee per million in the second quarter of 2012 was $4.06, reflecting $3.51 for Relationship Trading and $5.94 for Active Trading.

 

Operating expenses were $20.9 million, 13% higher than Q2 2011.  Adjusted EBITDA was $14.2 million, down from $14.8 million in Q2 2011.  The Adjusted EBITDA margin was 45% compared to 50% in the second quarter of 2011.

 

The effective tax rate for the second quarter was 39.8% compared to 42.8% in the second quarter of 2011.

 

Capital expenditures for the quarter ended June 30, 2012 were $3.9 million, consistent with the same period in 2011.

 

At June 30, 2012, cash, cash equivalents and investments available-for-sale were $68.8 million.

 

 

Financial Measures

 

Adjusted Net Income and Adjusted EBITDA are non-GAAP financial measures.  The Company believes that these non-GAAP financial measures, when taken into consideration with the corresponding GAAP financial measures, are important in understanding the Company’s operating results.  See the attached schedule for a full reconciliation of these non-GAAP financial measures to the most directly comparable financial measures prepared in accordance with GAAP.

 

 

 

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About FXall

 

FXall is the leading independent global provider of electronic foreign exchange trading solutions, with over 1,000 institutional clients worldwide. FXall’s offices in New York, Boston, Washington, London, Zurich, Hong Kong, Tokyo, Singapore, Sydney and Mumbai serve the needs of active traders, asset managers, corporate treasurers, banks, broker-dealers and prime brokers.

 

Contacts:

Investor contact:

Andrew Posen

Head of Investor Relations

Telephone: (646) 268-9952

andrew.posen@fxall.com

 

News media contact:

Dafina Grapci-Penney

Greentarget

Telephone: +44 20 7324 5486

Mobile: + 44 752 533 5733

dafina.grapci-penney@greentarget.co.uk

 

 

Cautionary Note Regarding Forward-Looking Statements

 

Certain statements in this press release constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Statements preceded by, followed by or that otherwise include the words “believes”, “expects”, “anticipates”, “intends”, “projects”, “estimates”, “plans”, “may increase”, “forecast” and similar expressions or future or conditional verbs such as “will”, “should”, “would”, “may” and “could” are generally forward-looking in nature and not historical facts. Any statements that refer to expectations or other characterizations of future events, circumstances or results, including all statements related to our estimated and projected earnings, revenues, costs, expenditures, cash flows, growth rates and financial results, our plans and objectives for future operations, growth, initiatives, or strategies are forward-looking statements.

 

Various risks that could cause future results to differ from those expressed by the forward-looking statements included in this press release include, but are not limited to, any failure to successfully execute our growth strategy, including failing to increase our FX trading volumes, or failing to grow and maximize our existing institutional client relationships or effectively cross-sell our products to our clients; economic conditions, such as the current Eurozone crisis, including their effect on the FX, financial and capital markets, our vendors and business partners, employment levels, and inflation; our loss of key personnel or our inability to hire additional personnel; damage or interruption to our electronic trading platform or information systems; the impact of governmental laws and regulations; changes in the competitive environment in our industry and the markets in which we operate; natural disasters, unusually adverse weather conditions, pandemic outbreaks, boycotts and geo-political events; and our failure to maintain effective internal controls. Other unknown or unpredictable factors also could have material adverse effects on our performance or achievements. In light of these risks, uncertainties, assumptions and factors, the forward-looking events discussed in this press release may not occur. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date stated, or if no date is stated, as of the date of this press release. Important assumptions and other important factors that could cause actual results to differ materially from those in the forward-looking statements are specified in FX Alliance Inc.’s Annual Report on Form 10-K for the year ended December 31, 2011, included under headings such as “Forward-Looking Statements,” “Risk Factors” and “Management’s Discussion and

 

 

 

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Analysis of Financial Condition and Results of Operations” and in other filings and furnishings made by the Company with the SEC from time to time. Except for our ongoing obligations to disclose material information under the federal securities laws, we undertake no obligation to release publicly any revisions to any forward-looking statements, to report events or to report the occurrence of unanticipated events unless required by law.

 

 

 

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FX ALLIANCE INC.

Consolidated Statements of Operations

(in thousands, except share and per share data)

(unaudited)

 

 

 

Three Months Ended

 

 

Six Months Ended

 

 

 

 

June 30,

 

 

June 30,

 

 

 

 

2012

 

 

2011

 

 

2012

 

 

2011

 

 

Revenues

 

 

 

 

 

 

 

 

 

 

 

 

 

Transaction fees

 

$23,987

 

 

$22,821

 

 

$46,792

 

 

$43,336

 

 

User, settlement, and license fees

 

7,409

 

 

6,608

 

 

14,625

 

 

13,477

 

 

Total revenues

 

31,396

 

 

29,429

 

 

61,417

 

 

56,813

 

 

Operating Expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

Salaries and benefits

 

12,703

 

 

12,460

 

 

26,814

 

 

24,590

 

 

Technology

 

1,940

 

 

1,448

 

 

3,838

 

 

3,032

 

 

General and administrative

 

1,989

 

 

1,523

 

 

4,100

 

 

2,992

 

 

Marketing

 

355

 

 

356

 

 

696

 

 

789

 

 

Professional fees

 

1,295

 

 

351

 

 

2,640

 

 

778

 

 

Depreciation and amortization

 

2,657

 

 

2,434

 

 

5,227

 

 

4,866

 

 

Total operating expenses

 

20,939

 

 

18,572

 

 

43,315

 

 

37,047

 

 

Operating income

 

10,457

 

 

10,857

 

 

18,102

 

 

19,766

 

 

Interest and other income (expense), net

 

(122)

 

 

51

 

 

(80)

 

 

141

 

 

Income before income taxes

 

10,335

 

 

10,908

 

 

18,022

 

 

19,907

 

 

Provision for income taxes

 

4,116

 

 

4,673

 

 

7,179

 

 

8,527

 

 

Net income

 

6,219

 

 

6,235

 

 

10,843

 

 

11,380

 

 

Accretion and allocated earnings of preferred stock

 

-

 

 

2,954

 

 

1,276

 

 

5,604

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income allocated to common stockholders

 

$6,219

 

 

$3,281

 

 

$9,567

 

 

$5,776

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per common share:

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$0.22

 

 

$0.16

 

 

$0.36

 

 

$0.27

 

 

Diluted

 

$0.21

 

 

$0.15

 

 

$0.35

 

 

$0.27

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted-average common shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

28,336,566

 

 

21,043,899

 

 

26,769,958

 

 

21,043,899

 

 

Diluted

 

29,433,797

 

 

21,582,989

 

 

27,712,678

 

 

21,517,390

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Income per common share including conversion of preferred at beginning of period:

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic1

 

$0.22

 

 

$0.22

 

 

$0.38

 

 

$0.40

 

 

Diluted1

 

$0.21

 

 

$0.22

 

 

$0.37

 

 

$0.40

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted Net Income per common share including conversion of preferred at beginning of period:

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic1

 

$0.24

 

 

$0.25

 

 

$0.43

 

 

$0.46

 

 

Diluted1

 

$0.23

 

 

$0.25

 

 

$0.41

 

 

$0.45

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted Weighted-average common shares outstanding including conversion of preferred at beginning of period:

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic1

 

28,336,566

 

 

28,284,637

 

 

28,321,545

 

 

28,284,637

 

 

Diluted1

 

29,433,797

 

 

28,823,727

 

 

29,264,265

 

 

28,758,128

 

 

 

 

1 Figures reflect non-GAAP financial measures

 

 

 

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FX ALLIANCE INC.

Consolidated Balance Sheets

(in thousands)

(unaudited)

 

 

 

June 30,
2012

 

 

December 31,
2011

 

 

 

 

 

 

 

 

 

 

Assets

 

 

 

 

 

 

 

Current assets

 

 

 

 

 

 

 

Cash and cash equivalents

 

$61,526

 

 

$127,722

 

 

Investments available-for-sale

 

7,241

 

 

7,077

 

 

Accounts receivable, net

 

16,531

 

 

13,122

 

 

Income taxes receivable

 

5,979

 

 

7,748

 

 

Deferred income taxes

 

5,010

 

 

5,390

 

 

Prepaid expenses and other current assets

 

2,323

 

 

2,284

 

 

 

 

 

 

 

 

 

 

Total current assets

 

98,610

 

 

163,343

 

 

 

 

 

 

 

 

 

 

Software development costs, net

 

22,756

 

 

19,746

 

 

Property and equipment, net

 

12,334

 

 

11,379

 

 

Deferred income taxes, net of current portion

 

9,858

 

 

11,298

 

 

Intangible assets, net

 

1,819

 

 

2,016

 

 

Goodwill

 

2,999

 

 

2,999

 

 

Other assets

 

2,546

 

 

1,730

 

 

 

 

 

 

 

 

 

 

Total assets

 

$150,922

 

 

$212,511

 

 

 

 

 

 

 

 

 

 

Liabilities, Reedemable Convertible Preferred Stock and Stockholders’ Equity

 

 

 

 

 

 

 

Current liabilities

 

 

 

 

 

 

 

Accounts payable and accrued expenses

 

$3,670

 

 

$5,985

 

 

Accrued compensation

 

9,870

 

 

13,575

 

 

Income taxes payable

 

1,722

 

 

924

 

 

Deferred revenues

 

226

 

 

287

 

 

Total current liabilities

 

15,488

 

 

20,771

 

 

Long term liabilities

 

 

 

 

 

 

 

Deferred rent

 

2,743

 

 

3,011

 

 

Commitments and Contingencies

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Redeemable Convertible Series A Preferred stock

 

-

 

 

109,276

 

 

 

 

 

 

 

 

 

 

Stockholders’ Equity

 

 

 

 

 

 

 

Preferred stock

 

-

 

 

-

 

 

Common stock

 

3

 

 

2

 

 

Additional paid-in capital

 

123,051

 

 

17,144

 

 

Accumulated other comprehensive income, net of tax

 

78

 

 

33

 

 

Retained earnings

 

9,559

 

 

62,274

 

 

Total stockholders’ equity

 

132,691

 

 

79,453

 

 

 

 

 

 

 

 

 

 

Total liabilities, redeemable convertible preferred stock and stockholders’ equity

 

$150,922

 

 

$212,511

 

 

 

 

 

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FX ALLIANCE INC.

Key Operating Metrics

(unaudited)

 

 

 

 

Three Months Ended

 

 

Six Months Ended

 

 

 

 

June 30,

 

 

June 30,

 

 

 

 

2012

 

 

2011

 

 

2012

 

 

2011

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Trading Volume (in millions)(1)

 

 

 

 

 

 

 

 

 

 

 

 

 

Relationship Trading

 

$4,577,826

 

 

$4,355,764

 

 

$8,928,708

 

 

$8,405,290

 

 

Active Trading

 

1,334,048

 

 

1,131,427

 

 

2,538,318

 

 

2,017,738

 

 

Total

 

$5,911,874

 

 

$5,487,191

 

 

$11,467,026

 

 

$10,423,028

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Trading Days (2)

 

64

 

 

64

 

 

128

 

 

128

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average Daily Volume (in millions)

 

 

 

 

 

 

 

 

 

 

 

 

 

Relationship Trading

 

$71,529

 

 

$68,059

 

 

$69,755

 

 

$65,666

 

 

Active Trading

 

20,845

 

 

17,678

 

 

19,831

 

 

15,764

 

 

Total

 

$92,374

 

 

$85,737

 

 

$89,586

 

 

$81,430

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Transaction Fees (in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

Relationship Trading

 

$16,067

 

 

$15,798

 

 

$31,641

 

 

$30,553

 

 

Active Trading

 

7,920

 

 

7,023

 

 

15,151

 

 

12,783

 

 

Total

 

$23,987

 

 

$22,821

 

 

$46,792

 

 

$43,336

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average Transaction Fee per Million

 

 

 

 

 

 

 

 

 

 

 

 

 

Relationship Trading

 

$3.51

 

 

$3.63

 

 

$3.54

 

 

$3.63

 

 

Active Trading

 

$5.94

 

 

$6.21

 

 

$5.97

 

 

$6.34

 

 

Total

 

$4.06

 

 

$4.16

 

 

$4.08

 

 

$4.16

 

 

 

 

(1) Notional U.S. dollar-equivalent (calculated at the time of trade) of trades executed on FXall generating transaction fees (counting one side of the transaction)

(2) Trading days include each Monday through Friday excluding New Year’s Day, Good Friday and Christmas Day.

 

 

 

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FX ALLIANCE INC.

Reconciliation of Non-GAAP Financial Measures

(in thousands, except share data)

(unaudited)

 

 

 

Three Months Ended

 

 

Six Months Ended

 

 

 

 

June 30,

 

 

June 30,

 

 

 

 

2012

 

 

2011

 

 

2012

 

 

2011

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted EBITDA:

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

$6,219

 

 

$6,235

 

 

$10,843

 

 

$11,380

 

 

Interest and other income

 

122

 

 

(51)

 

 

80

 

 

(141)

 

 

Depreciation and amortization

 

2,657

 

 

2,434

 

 

5,227

 

 

4,866

 

 

Stock-based compensation expense

 

1,061

 

 

1,522

 

 

1,947

 

 

2,817

 

 

Provision for income taxes

 

4,116

 

 

4,673

 

 

7,179

 

 

8,527

 

 

Adjusted EBITDA

 

$14,175

 

 

$14,813

 

 

$25,276

 

 

$27,449

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted Net Income:

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

$6,219

 

 

$6,235

 

 

$10,843

 

 

$11,380

 

 

Stock-based compensation expense, net of tax

 

652

 

 

865

 

 

1,197

 

 

1,601

 

 

Adjusted Net Income

 

$6,871

 

 

$7,100

 

 

$12,040

 

 

$12,981

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted Weighted-average basic common shares outstanding including conversion of preferred at beginning of period:

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted-average basic common shares outstanding

 

28,336,566

 

 

21,043,899

 

 

26,769,958

 

 

21,043,899

 

 

Conversion of preferred shares into common shares

 

-         

 

 

7,240,738

 

 

1,551,587

 

 

7,240,738

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted Weighted-average basic common shares outstanding including conversion of preferred

 

28,336,566

 

 

28,284,637

 

 

28,321,545

 

 

28,284,637

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted Weighted-average fully diluted common shares outstanding including conversion of preferred at beginning of period:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted-average fully diluted common shares outstanding

 

29,433,797

 

 

21,582,989

 

 

27,712,678

 

 

21,517,390

 

 

Conversion of preferred shares into common shares

 

-         

 

 

7,240,738

 

 

1,551,587

 

 

7,240,738

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted Weighted-average fully diluted common shares outstanding including conversion of preferred

 

29,433,797

 

 

28,823,727

 

 

29,264,265

 

 

28,758,128

 

 

 

 

 

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